November 8, 2017

SegWit2X abandoned: Backers call off November hard fork over lack of support

Tech

November 8, 2017

The highly controversial SegWit2X is officially no more.

Proponents of the SegWit2X project announced on Wednesday they are cancelling plans for the contentious hard fork event, which is expected to activate on Nov. 16. The reason: Insufficient support from the community.

In a post, Bitgo CEO Mike Belshe acknowledged that the scaling project is too controversial to move forward.

“Although we strongly believe in the need for a larger blocksize, there is something we believe is even more important: keeping the community together,” Belshe wrote. “Unfortunately, it is clear that we have not built sufficient consensus for a clean blocksize upgrade at this time. Continuing on the current path could divide the community and be a setback to Bitcoin’s growth. This was never the goal of SegWit2X.”

The post was also signed off by companies that originally supported the project, including Xapo CEO Wences Casares, Bitmain co-founder Jihan Wu, Bloq co-founder and CEO Jeff Garzik, Blockchain co-founder and CEO Peter Smith, and Shapeshift founder and CEO Erik Voorhees.

SegWit2X was initially mediated as the New York Agreement, a compromise between the warring camps of the scaling debate. The plan was to upgrade the SegWit chain to increase the capacity of the network from ~250,000 transactions per day to ~500,000 transactions per day within six months from May 2017, when the consensus was reached.

Companies, however, started dropping out of the New York Agreement after it became clear to them that the fork will only divide the community further. This ultimately led to the cancellation of the November hard fork, although SegWit2X supporters said they are still advocating for a block size increase—one that will pave the way for a “smooth upgrade.”

“As fees rise on the blockchain, we believe it will eventually become obvious that on-chain capacity increases are necessary. When that happens, we hope the community will come together and find a solution, possibly with a blocksize increase. Until then, we are suspending our plans for the upcoming 2MB upgrade,” the group said.

In response to the news, the price of BTC immediately shot up, hitting a new all-time high of $7,900 before consolidating near the $7,700 level.

Great news for BCH

The abandonment of SegWit2X fork is a major victory for supporters of the true Bitcoin as intended by the original Satoshi white paper. With the cancellation, the SegWit asset coin and Bitcoin (BCH) can now go their own way—people can use SegWit coin for storage, then BCH for commerce and transactions.

The SegWit branch, which entails high transaction fees, will stay small as it locks into its non-transactional business model, although they can still be used as institutional value transfer system. BCH, on the other hand, aims to grow bigger and become a worldwide peer-to-peer electronic cash system, able to compete directly with mainstream payment processors.